M.KATJU, J. - (1.) THIS writ petition has been filed for a mandamus restraining the respondents from levying or collecting any cess under the Research and Development Cess Act, 1986 (hereinafter referred as the 'Cess Act') in respect of payments made and to be made by the Petitioner No. 1, Wig Brother (Builders and Engineers) Private Ltd. to M/s. Heit -Camp and/or Balcke Durr (German Companies) under the Collaboration Agreement dated 28 -11 -1989 between M/s Heit -Kamp and the petitioner No. 1. Petitioners also prayed for declaring. The levy and collection of cess under the Cess Act on payments made by the Petitioner No. 1 to Heit Kamp and/or Balcke -Durr as ultra vires the Cess Act and the Rules made thereunder. Petitioners have also prayed for quashing the Demand Notice dated 22 -7 -1991 under Rule 6 of the Rules to the petitioner by Respondent No. 3. They have also prayed for declaring Section 2(h) of the Act as ultra vires Articles 14 and 19 (1) (g) of the Constitution and Rule 3 of the Rules as ultra vires the Act.
(2.) WE have heard learned Counsel for the parties. The Petitioner No. 1 is a company incorporated under the provisions of the Companies Act having its Registered Office at Mathura Road, New Delhi. It is executing the works in respect of which Cess under the Act is sought to be levied and collected from the Petitioner No. 1 at Vidyut Nagar, Dadri in the State of Uttar Pradesh. It is alleged in para 2 of the petition that 70 percent of the Contract work has already been executed at Dadri in respect of which the cess is being levied. The Cess Act was brought into force with effect from 1 -12 -1987 Section 2 (d) of the Act defines 'import' as follows: (d) Import in relation to any technology, means the bringing into India of such technology from a place outside India, Section 2 (e) defines Industrial concern as follows: (e)Industrial concern has the meaning assigned to it in clause (c) of Section 2 of the Industrial Development Bank of India Act, 1964 and includes any other person in whose favour a foreign collaboration involving the import of technology is approved by the Central Government. Section 2 (h) defines technology as follows: (h) Technology means any special or technical knowledge or any special service required for any purpose whatsoever by an industrial concern under any foreign collaboration, and includes designs, drawings, publications and technical personnel. Section 3 of the Act states: (1) There shall be levied and collected for the purposes of this Act, a cess at such rate not exceeding five percent on all payments made towards the import of technology, as the Central Government may, from to time, specify, by notification in the Official Gazette. (2) The cess shall be payable to the Central Government by an Industrial concern which imports technology on or before making any payments towards such import and shall be paid by the Industrial concern to any specified agency.
(3.) UNDER Section 9 (2) of the Act, penalty can be imposed for non payment cess, not exceeding ten times the amount in arrears.;